Waste to Energy scheme progresses

Introduction

Certain provisions of the Circular Economy (Waste Reduction and Recycling) Act 2021 (CEWRR Act) together with the Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Regulations 2023 (WtE Regulations) came into operation on 1 June 2023.

This legislation relates to the Victorian Waste to Energy Framework and its commencement means the permissions regime for ‘existing operators’ (see further explanation below) of thermal waste to energy facilities (WtE Facilities) in Victoria will “go live”.

In our previous update we set out an overview of the WtE scheme and the CEWRR Act under which the WtE Regulations are made. Further details can be found here.

Below we provide a summary of:

• Who is regarded as an existing operator;
• The content of the WtE Regulations; and
• Future regulations that are anticipated, including in relation to the ‘cap’.

Who is an ‘existing operator’?

Under the CEWRR Act, a ‘waste to energy licence’ (WtE Licence) is required to operate a thermal WtE Facility. A WtE Licence can be either:

• An existing operator licence (an EOL); or
• A ‘cap’ licence.

The WtE Regulations are the first tranche of regulations regulating WtE Facilities and they provide the details for ‘existing operators’ to obtain an EOL for WtE Facilities.

To be an ‘existing operator’ the WtE facility must already have the necessary licences and permits under the Environment Protection Act 2017 and / or Planning and Environment Act 1987 and those licences or permits must have been in force immediately before November 2021 (Existing WtE Facilities). However, the WtE Facility itself does not need to be operational i.e. it is not required to have achieved “first fire” or already be generating energy to fall within the WtE Regulations.

An EOL is required to specify the maximum amount of permitted waste that may be processed at a WtE Facility.

Applications for an EOL for Existing WtE Facilities must be made by 1 December 2023.

The content of the WtE Regulations

The WtE Regulations regulate the suspension, immediate suspension, revocation and immediate revocation of a WtE Licence for a WtE Facility if there is:

1. non-compliance with any development or operating licence issued under the Environment Protection Act 2017; or
2. any unacceptable risk of harm to human health or the environment from the WtE Facility if the licence is not suspended (or revoked).

The WtE Regulations provide a mechanism for the transfer of a WtE Licence to another ‘fit and proper person’ with the written consent of the holder of the operating licence. This will assist where operators wish to sell a facility pursuant to a sale of business or other divestment transaction.

A cap licence and future regulation

The Victorian Waste to Energy Framework provides a 1 million tonne ‘cap’ or limit on the amount of waste that can be heat treated to make energy in Victoria. Under the CEWRR Act a licence may be issued under this cap (referred to as a cap licence).

Applications to submit an expression of interest or apply for a cap licence, are not yet open. Future regulations are anticipated in the coming months to cover ‘cap’ licences and the licensing and development of future facilities and expansions to Existing WtE facilities. Public consultation is expected to occur on the second tranche of regulations later in 2023.

A cap licence will in future be issued under section 74T of the CEWRR Act and will be issued to an ‘approved applicant’ for a proposed or existing thermal WtE Facility.

Under the CEWRR Act, existing operators proposing to increase the amount of permitted waste processed at an Existing WtE Facility may be invited to apply for a cap licence for that existing WtE Facility. It is possible to seek an amendment of a cap licence to increase the cap (or amount of permitted waste that may be processed), if the overall cap limit of 1million tonnes has not been reached.

At present, it is only possible for Existing WtE Facilties to hold an EOL and a cap licence under the CEWRR Act and WtE Regulations. The cap applies to thermal WtE processes. Notably the following are not regarded as thermal WtE processes:

• an advanced recycling process;
• a biological WtE process;
• landfill gas collection and combustion or incineration of waste without energy recovery;
• a process that recovers energy from a material other than waste;
• a process prescribed not to be a thermal waste to energy process, such as thermal WtE processes for which a pilot project licence has been issued or a process that treats waste biomass through pyrolosis or gasification process to sequester carbon.

Certain wastes can be used for thermal WtE outside of a ‘cap licence’. These wastes are referred to as ‘exempt waste’. The definition of “exempt waste” under the CEWRR Act and WtE Regulations includes wastes from:

• biomass such as wood waste and waste from primary production processes relating to agricultural crops, nuts, olives, fruits and grapes;
• manufacturing processes related to fruit and vegetable processing, and residues from pulp and paper manufacturing that can’t be recycled into new paper products;
• biosolids; and
• reportable priority waste.

If you are interested in finding out more about waste to energy, or need assistance in developing or obtaining approvals for a waste to energy facility, please contact a member of our Environment and Planning team.